United Official
Saturday, November 7th, 2009
After Hutcheson Medical Center officials ended a contract with United Healthcare this summer because of low payment rates, the insurer is back at the negotiation table, the hospital’s CEO said.
“Unfortunately, they did not appear willing to seriously negotiate until it got to this point,” said Charles Stewart, CEO of Hutcheson in Fort Oglethorpe. “It was extremely stressful for the potential patients ... who were concerned about their lack of ability to use the local hospital.”
Last week, the insurer and hospital reached a preliminary agreement that still must be finalized into a contract, Mr. Stewart said.
A United official maintains that the insurer has been willing to negotiate all along.
“We’re still looking to see a good solution to this and that’s why we are continuing to reach out to them,” said Roger Rollman, spokesman for United.
Mr. Rollman said the company would not comment on any specifics of the negotiation, including reimbursement rates.
About 5 percent to 6 percent of Hutcheson’s patients had United insurance at the time the contract expired on Aug. 1, meaning those patients — largely state employees in the area — would not be able to seek hospitalization or elective surgery at Hutcheson without facing expensive out-of-network costs.
State employees are now in an open enrollment period, in which they can choose United or Cigna Healthcare as part of their state health benefits plan.
If an agreement is worked out between United and Hutcheson, the contract would not go into effect until January, Mr. Stewart said.
HARD-LINE NEGOTIATIONS
Earlier this year, Hutcheson officials had threatened to end their contract with the insurer because of low reimbursements, setting a deadline of July 31 to come up with a mutually acceptable rate.
Hospital officials complained that United paid rates below even Medicare and Medicaid, and that the hospital often lost money when treating United patients.
The insurer and hospital did not succeed in reaching an agreement and the contract ended at that date.
Hard-line negotiations between hospitals and insurers are becoming common, Jeff Myers, former chief operating officer at United Healthcare in Atlanta, said in an interview earlier this month. He is the incoming CEO of Hamilton Medical Center in Dalton, Ga.
To even get a large payer to the bargaining table, providers often have to threaten termination, he said.
“Unfortunately, that’s become the norm to enable you to get their attention,” he said. “The larger payers have become extremely bureaucratic in their decision-making process and many times the frontline folks that you’re negotiating with have no authority.”
As Hutcheson and United continued to butt heads this summer, local legislators even got involved in an effort to mediate the negotiations. A loss of the contract would mean that Georgia state employees — and Georgia state dollars — would have to travel across the state line to Chattanooga hospitals.
“I felt like, personally, for United Healthcare to allow that contract to be terminated, allowing Georgia dollars to go across the state line ... was not acceptable and I could not sit by and let that happen,” said Rep. Jay Neal, R-Chickamauga. “I told United Healthcare that I was appalled they were not even at the Medicare level and put some pressure on them.”
For patients in the middle of treatment at Hutcheson, the lull in insurance coverage has created a stressful situation.
Staci Harris of Chickamauga, Ga., was due to deliver a baby at Hutcheson just weeks after she found out the hospital ended its contract with United, her insurer.
Since the Cherokee Ridge Elementary School teacher was already in the middle of treatment, she was able to get a “continuation of care” agreement that would allow her to still have her baby as planned at in-network prices, but it wasn’t easy, she said.
“I had to go through a lot of red tape,” she said. “I didn’t think I was going to get to go, but right at the last minute I got a continuation of care form. It ended up working out, but it was a major ordeal.”
THE STORY SO FAR
Hutcheson Medical Center officials warned United Healthcare in January that, if the insurer did not offer a better reimbursement rate in its contract, Hutcheson would let its contract expire on July 31. The insurer and hospital could not reach an agreement and the contract ended. The lapse in coverage meant that patients insured under United would have to pay expensive out-of-network costs if they visited Hutcheson. Now the hospital and United are again in negotiations and the two companies have reached a preliminary agreement.
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